UnitedHealth Group Completes Acquisition of Sierra Health Services
Companies Receive Approval from U.S. Department of Justice; UnitedHealth Group Agrees to Divest Individual Medicare Advantage Plans in Clark and Nye Counties, Nevada
Combined Company Will Provide a Comprehensive Range of Affordable Products and Services to Health Care Consumers in the Southwest
UnitedHealth Group (NYSE: UNH) and Sierra Health Services, Inc. (NYSE: SIE) today announced that they completed their transaction effective as of the close of business today. Under the merger agreement, Sierra stockholders receive $43.50 in cash for each share of Sierra common stock, representing an equity value of approximately $2.6 billion.
The U.S. Department of Justice has provided approval of the acquisition. As a condition of approval, UnitedHealth Group will divest its individual SecureHorizons Medicare Advantage HMO plans in Clark and Nye Counties, which represent approximately 25,000 members. UnitedHealth Group has reached an agreement to transition these members to Humana Inc., subject to customary closing conditions.
UnitedHealth Group and Humana have agreed to work together to ensure a seamless transition of the individual SecureHorizons Medicare Advantage HMO plans in Clark and Nye Counties and will notify affected members as details become available. UnitedHealth Group emphasized that post-divestiture, these members will continue to receive the benefits they currently have, and there will be no interruption in these members’ health care coverage.
Group SecureHorizons Medicare Advantage plans offered to retirees through commercial customers or contracts are currently excluded from the divestiture and will continue to be operated by UnitedHealth Group. Sierra will retain its Medicare Advantage HMO plans in Nevada which are offered under the Senior Dimensions brand.
Ken Burdick, CEO of UnitedHealthcare, said, “We look forward to building on our shared heritage of providing consumers access to affordable, high-quality health care. Our goal is to offer Nevadans the most comprehensive range of cost-effective, innovative health care products and services in the Southwest.”
Jonathon Bunker, president and COO of Sierra, said, “Joining our two organizations will be good for Nevada’s health care consumers, good for the many dedicated professionals who provide their care and good for the employees of Sierra. With greater resources and advanced technology, we can now build upon our legacy by providing more options for our members and expanded access to the largest national network of hospitals, physicians and other care providers.”
In connection with the transaction, UnitedHealth Group and Sierra also reached an agreement with Nevada Attorney General Catherine Cortez Masto that is consistent with the terms of the Department of Justice consent decree. As part of that agreement, and consistent with UnitedHealth Group’s longstanding commitment of philanthropic initiatives to improve and expand health care access for underserved populations, UnitedHealth Group will make $15 million in charitable contributions over the next five years to benefit health care consumers and programs in the State of Nevada.
Today’s news does not impact UnitedHealth Group’s full year 2008 financial outlook, which previously included projected results for Sierra. UnitedHealth Group continues to project full year revenue of approximately $83 billion and earnings in the range of $3.95 - $4.00 per share.
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